Business Context and Reporting Period
D-Wave Quantum Inc. filed this Form 8-K on July 13, 2023, reporting entry into a material amendment to its loan agreement with PSPIB Unitas Investments II Inc., an affiliate of PSP Investments. The report was signed on July 19, 2023.
Financing and Key Financial Matters
- The company entered into a Limited Waiver and Second Amendment to its April 13, 2023 Loan and Security Agreement, as previously amended on June 16, 2023.
- PSPIB waived certain conditions and provided funding under Loan B.
- The amendment extended the deadline for delivery of a PSPIB-approved operating budget and plan covering fiscal years 2023 through 2027 from the original pre-funding requirement to August 31, 2023.
- The filing does not provide the principal amount, interest rate, maturity date, or other economic terms of Loan B.
- The amendment waives the requirement to nominate an additional director before Loan B funding. PSPIB may require the company to satisfy this nomination requirement upon five business days’ notice.
- Intellectual-property registration and filing notifications are now due within five business days after the end of each month, rather than within five business days following each registration or filing.
Material Changes Versus the Prior Period
The filing reports financing-related amendments and waivers rather than operating or periodic financial results. It confirms that D-Wave was able to draw on Loan B but states that there is no assurance the company will satisfy the conditions required to draw on Loan C.
Guidance, Outlook, Risks, and Unusual Items
- The company must deliver the operating budget and plan for fiscal years 2023–2027 by August 31, 2023.
- PSPIB retains the option to require fulfillment of the additional-director nomination requirement on five business days’ notice.
- The inability to draw on Loan C could adversely affect liquidity and financing flexibility; the filing provides no quantified liquidity impact.
- The amendment creates or modifies obligations under the company’s secured term loan. The filing does not provide revenue guidance, earnings guidance, cash-flow forecasts, margins, debt balances, or liquidity metrics.
Important Facts for Investors to Verify
- Review Exhibit 10.1 for the complete Loan B and Loan C conditions, collateral provisions, covenants, repayment terms, and potential events of default.
- Confirm the amount and timing of the Loan B draw and its effect on cash and total debt.
- Determine whether the company delivered the required 2023–2027 operating budget by August 31, 2023.
- Monitor whether PSPIB exercised its director-nomination option and whether D-Wave satisfied the conditions for Loan C.
- Assess subsequent filings for updated liquidity, going-concern considerations, and any additional financing actions.